When it comes to selling a house in Texas, homeowners may consider selling a home "as is."
Sellers are increasingly investing in home improvements to attract buyers without reducing their asking price. For those who don’t have the time, resources, or desire to make significant repairs or upgrades, however, an as-is sale can be a better alternative.
In this article, the professionals at Texas Horizons Law Group will explain what it means to sell a house “as is” in Texas, the steps involved in the process, and the pros and cons of this approach.
Whether you’re a first-time seller or a seasoned property owner, if you need guidance navigating the legal aspects of your real estate transaction, our board-certified real estate attorneys are here to help.
What Is Selling a House “As Is” in Texas?
The concept of an as-is sale refers to the fact that the property is offered for sale in its current condition without any repairs, upgrades, or modifications on the seller's part. When a buyer purchases a home “as is,” they agree to accept the property with all its flaws, whether they’re visible or hidden.
It’s important to note that selling a house “as is” doesn’t exempt the seller from their legal obligation to disclose known defects or issues with the property. Texas Property Code requires sellers to provide a detailed disclosure form outlining any known problems with the home, such as structural issues, plumbing defects, or electrical malfunctions.
What Are the Pros and Cons of Selling a House “As Is”?
The pros of an as-is sale are that the seller is not required to make any additional repairs and is not liable for unknown defects, assuming they did not make any false or misleading statements to the buyer. The cons are that the buyer may want repairs made and can’t rely upon the seller’s representation that the repairs were properly made to the house.
Steps for Selling a House “As Is” in Texas
Selling a property in its current condition involves a few extra considerations compared to a traditional home sale. Here are the steps required to navigate the process with confidence.
Complete the Seller's Disclosure Form Accurately
Texas law requires sellers to provide a detailed seller's disclosure form outlining any known defects or issues with their properties. It’s crucial to fill out this form thoroughly and accurately to avoid legal issues down the line. Consult a qualified real estate attorney for guidance if you're unsure what to include.
Include an As-Is Clause in the Purchase Contract
A contract with a clearly stated as-is condition clause should include that the buyer is relying upon the buyer’s own inspection of the property for determining the condition of the property and not relying upon any actions, representations, or omissions by the seller. The clause should be drafted by a qualified real estate attorney. There are protections for the Seller that should be included in the Contract in the event defects are discovered by the Buyer.
Seller's Disclosure Obligations
It’s worth reiterating that “as is” doesn’t mean sellers can avoid disclosing known problems. Texas law requires sellers to be truthful about any material defects in the property. If a seller withholds or downplays the cost of repairs, they may be held responsible for fixing those issues.
Can a Buyer Sue a Seller After Closing in Texas?
Yes, you can still be sued for selling a house "as is" if you fail to disclose known material defects. It's crucial to be honest about any issues to avoid legal trouble. An "as is" clause does not shield you from liability for intentionally concealing serious issues you are aware of.
How long are you liable after selling a house in Texas? Sellers can be held responsible for hidden defects known to the sellers for up to four years after the sale if they fail to disclose them beforehand.
The Seller can be protected from liability for defects discovered after closing by a contract in which the Buyer releases the Seller from liability for all implied warranties and the Buyer acknowledges that the Seller did not make any representations regarding the Property. Â
Buyer's Right to Terminate an As-Is Contract in Texas
The contract can include an option period during which time the buyer can thoroughly examine the property and make an informed decision. If, during this inspection period, they discover issues they aren’t comfortable with, they can back out of the contract without penalty or loss of their earnest money deposit.
Seller's Right to Cancel an As-Is Contract in Texas
Cancellation typically requires a demonstrable breach of contract by the buyer, such as missed deadlines or inability to secure financing. To navigate this scenario effectively and minimize potential legal ramifications, it’s highly advisable to consult a real estate attorney before attempting to cancel an as-is contract.
